Page 48 - DCAP302_ENTERPRISE_RESOURCE_PLANNING

Enterprise Resource Planning

notes 3. Information: Integration of systems and processes through the supply chain to share valuable
information, including demand signals, forecasts, inventory and transportation, etc.
4. Inventory Management: Quantity and location of inventory including raw materials, work-
in-process and finished goods.
5. Cash-Flow: Arranging the payment terms and the methodologies for exchanging funds
across entities within the supply chain.
Supply chain execution is managing and coordinating the movement of materials, information
and funds across the supply chain. The flow is bi-directional.

Activities/Functions

Supply chain management is a cross-functional approach to managing the movement of raw
materials into an organization, certain aspects of the internal processing of materials into finished
goods, and then the movement of finished goods out of the organization toward the end-consumer.
As organizations strive to focus on core competencies and becoming more flexible, they have
reduced their ownership of raw materials sources and distribution channels. These functions are
increasingly being outsourced to other entities that can perform the activities better or more cost
effectively. The effect is to increase the number of organizations involved in satisfying customer
demand, while reducing the management control of daily logistics operations. Less control
and more supply chain partners led to the creation of supply chain management concepts. The
purpose of supply chain management is to improve trust and collaboration among supply chain
partners, thus improving inventory visibility and improving inventory velocity.
Several models have been proposed for understanding the activities required to manage
material movements across organizational and functional boundaries. SCOR is a supply chain
management model promoted by the Supply Chain Management Council. Another model is the
SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be
grouped into strategic, tactical, and operational levels of activities.

Strategic network optimization, including the number, location, and size of warehouses,
distribution centers and facilities.
Strategic partnership with suppliers, distributors, and customers, creating communication
channels for critical information and operational improvements such as cross docking, direct
shipping, and third-party logistics.
Product design coordination, so that new and existing products can be optimally integrated into
the supply chain, load management.
Information Technology infrastructure, to support supply chain operations.
Where-to-make and what-to-make-or-buy decisions.

Aligning overall organizational strategy with supply strategy.
Operational

1. Daily production and distribution planning, including all nodes in the supply chain.
2. Production scheduling for each manufacturing facility in the supply chain (minute-by-
minute).

3. Demand planning and forecasting, coordinating the demand forecast of all customers and
sharing the forecast with all suppliers.
4. Sourcing planning, including current inventory and forecast demand, in collaboration with
all suppliers.

42 LoveLy professionaL university